Property Market Information: New home lending activity increased during May

By the resi financial blog team, 15 July 2014

The latest release from the Australian Bureau of Statistics has highlighted the rising strength of new home lending activity, which has been steadily increasing during the year. In fact, Housing Industry Association (HIA) Chief Economist Harley Dale said the upwards movement was an encouraging sign of development within the market - potentially good news for those considering taking out a home loan in the coming months.

Approvals for construction loans increased by 0.9 per cent over the month of May, following a 3.1 per cent growth over the three months to May. Loans for the purchase of new dwellings also grew in May, increasing by 1.6 per cent. Tasmania (13.8 per cent) saw the largest rise in new housing loans during this three-month period, followed by Western Australia (8 per cent), Queensland (7.6 per cent) and New South Wales (2.1 per cent).

"Construction loans, the principal component of new home lending, are at their highest level in over four years. New dwelling commencements are on track to hit their second highest level on record in 2014. It is also encouraging to see that lending for larger alterations and additions is moving higher since a low point reached in February," said Mr Dale in a July 11 statement.

"The total alts and adds market hit a decade low in 2013 and a turnaround this year would clearly be a desirable outcome. With low interest rates and the recurrence of capital gains, there is the opportunity for the alts and adds market to gather upward momentum."

With these rates of growth occurring across the nation - for both new homes and renovations - it could be worth investigating the options available to you. Get in contact with a home loan expert to discuss the financial options open to you and begin looking into the new home market across Australia.